You cannot read the description of the personal stock trading
allegedly conducted by Rep. Spencer Bachus and other members of
Congress during the financial crisis and conclude anything other
than the following:

Our government is completely corrupt.

Yes, this behavior may be technically legal, because of an absurd
loophole that makes insider-trading rules not apply to Congress.

Yes, this behavior may be widespread on Capitol Hill.

But there is no universe in which a reasonable person would
consider this behavior ethical or okay. And for the 300+ million
Americans who aren't members of Congress, it would be just plain
illegal

Many members of Congress seem guilty here, including John Kerry,
Dick Durbin, and Jim
Moran. But Spencer Bachus takes the cake.

According to a new book called Throw Them All Out by
Peter Schweizer, as relayed by
Dave Weigel at Slate, Rep. Bachus made more than 40 trades in
his personal account in the summer and fall of 2008, in the early
months of the financial crisis.

The fact that Bachus personally traded on private information he
received as a result of his job is bad enough. The fact that he
was the ranking member of the House Financial Services Committee
at the time is simply outrageous.

In one case, the day after getting a private briefing on the
collapsing economy and financial system from Ben Bernanke and Hank Paulson, Rep. Bachus effectively shorted
the market (by buying options that would rise if the market
tanked.)

A few days later, after the market tanked, Bachus sold his
position and nearly doubled his money.

If a corporate executive or Wall Street trader did this--cashed
in personally after getting private, non-public information from
his work--Rep. Bachus and every other member of Congress would be
screaming from the rooftops about how the financial system is
deeply corrupt and how the executive should be charged with
insider trading.

And they would be right.

Rep. Bachus should return whatever money he made by betting on
the direction of the markets (or anything else) in the fall of
2008. He should apologize for his behavior and jaw-dropping lack
of judgement. He should urge his fellow members of Congress to
immediately enact legislation that defends the fairness of the
markets by holding Congress to the same insider trading laws as
everyone else. He should then resign in disgrace.

Here's the passage from Throw Them All Out, as
relayed by Slate's Dave Weigel. According to Weigel, it is
only one of many examples of Bachus's insider trading:

On the evening of September 18, at 7 p.m., Bachus received [a]
private briefing for congressional leaders by Hank Paulson and
Federal Reserve Bank Chairman Ben Bernanke about the current
state of the economy. They sat around a long table in the office
of Nancy Pelosi, then the Speaker of the House.
These briefings were secretive. Often, cell phones and
Blackberrys had to be surrendered outside the room to avoid
leaks.

What Bachus and his colleagues heard behind closed doors was
stunning. As Paulson recounts, “Ben [Bernanke] emphasized how the
financial crisis could spill into the real economy. As stocks
dropped perhaps a further 20 percent, General Motors would go
bankrupt, and unemployment would rise . . . if we did nothing.”
The members of Congress around the table were, in Paulson’s
words, “ashen-faced."

Bernanke continued, “It is a matter of days before there is a
meltdown in the global financial system.” Bachus was among those
who spoke. According to Paulson, he suggested recapitalizing the
banks by buying shares.

The meeting broke up. The next day, September 19, Congressman
Bachus bought contract options on Proshares Ultra-Short QQQ, an
index fund that seeks results that are 200% of the inverse of the
Nasdaq 100 index. In other words, he was shorting the market. It
was an inexpensive way to bet that the market would fall. He
bought options for $7,846 on a day when the Dow Jones Industrial
Average opened at 8,604. A few days later, on September 23, after
the market had indeed fallen, he sold the options for over
$13,000 and nearly doubled his money.